Ely Valley Mines, Inc. v. Hartford Acc. and Indem. Co.

• Decision Date: 11 May 1981
• Docket Number: No. 78-3425,78-3425
• Citation: 644 F.2d 1310
• Parties: ELY VALLEY MINES, INC., Pioche Mines Consolidated, Inc., Plaintiffs-Appellants, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Americo L. Campini, Leland Donahue, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1310

644 F.2d 1310

ELY VALLEY MINES, INC., Pioche Mines Consolidated, Inc. Plaintiffs-Appellants, v. HARTFORD ACCIDENT AND INDEMNITY COMPANY, Americo L. Campini Leland Donahue, Defendants-Appellees.

No. 78-3425.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Oct. 14, 1980.

Decided May 11, 1981.

David Horton, Carson City, Nev., for plaintiffs-appellants.

Alvin N. Wartman, Las Vegas, Nev., for defendants-appellees.

Appeal from the United States District Court for the District of Nevada.

Before SKOPIL and POOLE, Circuit Judges, and TAKASUGI, ^* District Judge.

TAKASUGI, District Judge:

Plaintiffs, commenced this action for damages against their court-appointed receiver, Americo L. Campini; Hartford Accident The action was initially brought in a Nevada state court and removed pursuant to 28 U.S.C. § 1442(a)(3) to the U.S. District Court for the District of Nevada.

and Indemnity Co., surety on the receiver's bond; and Leland Donahue who assisted the receiver.

The district court denied remand and subsequently dismissed for lack of prosecution. Plaintiffs appeal both these rulings. We affirm. Our jurisdiction is founded upon 28 U.S.C. § 1291.

I REMOVAL

Appellants contend that 28 U.S.C. § 1442 does not provide removal jurisdiction in the instant action.

28 U.S.C. § 1442 permits removal of an action against

Any officer of the courts of the United States, for any Act under color of office or in the performance of his duties; ...

28 U.S.C. § 1442(a)(3).

Although a receiver is an officer of the courts of the United States, the question here is whether this case involves an "Act under color of office or in the performance of his duties."

In appellants' complaint, the defendant receiver is charged with personal wrongdoing (e. g., falsely testifying before the district court, obtaining wrongful orders from the district court, failing to account as ordered by court, refusing to return properties contrary to mandate of Ninth Circuit Court of Appeals regarding wrongfully procured receivership, failing to comply with various court orders, etc.) in addition to vicarious responsibility arising out of the receiver's operation of the business (e. g., failing to maintain underground air circulation, shafts, buildings, machinery and other mining properties).

Prior to the Supreme Court decision in Gay v. Ruff, 292 U.S. 25, 54 S.Ct. 608, 78 L.Ed. 1099 (1934), some courts permitted removal by a federal court appointed receiver only if such suits were based upon the receiver's personal wrongdoing. Other courts also allowed removal based on negligence in the operation of the debtor's business where the receiver's liability was entirely vicarious.

Appellants contend that Gay v. Ruff, supra, prohibits removal here. Although the Supreme Court in Gay v. Ruff somewhat restricted the removability by federal receivers under § 33 of the Judicial Code, ¹ it did not hold that receivers are not within the ambit of said statute. Ruff brought suit in state court against Gay, as receiver of a railway company. The cause of action alleged was wrongful death resulting from the negligent operation of a train by employees of the receiver. The defendant receiver contended that the case was removable because he was an officer of the federal court and a damage action resulting from the negligent operation of a train by his employees was a suit "for or on account of" an "act done in the performance of his duties as such officer." The Court rejected his argument stating that:

The receiver here sued, although an officer of the court operating the railroad pursuant to the order appointing him, is not an officer engaged in enforcing an order of a court. The operation of trains through his employees is a duty imposed upon the receiver; but he is not entrusted in his capacity as receiver with the service or execution of any process of the court. Nor is there reason to assume that he will in this case rest his defense on his duty to cause the train to be operated. 292 U.S. at 39, 54 S.Ct. at 615.

Thus, the result of the Supreme Court's decision in Gay v. Ruff is that removal by a federal court appointed receiver is proper under 28 U.S.C. § 1442(a) when the plaintiff is challenging the receiver's personal dereliction in the execution of the Court's orders or judgments but not when the receiver is negligent in performing duties not entrusted to him by the courts. Id. at 35 and 39, 54 S.Ct. at 613 and 615.

This distinction drawn by the Supreme Court is the result of construing § 1442 in light of the federal interest served in providing for removal.

The general policy underlying federal removal legislation is to permit removal when there is a federal interest in allowing access to a federal forum.

This policy is translated into legislation with respect to court officers in 28 U.S.C. § 1442(a)(3), wherein removal is permitted by an officer of the courts "for any Act under color of office or in the performance of his duties." Given that the above quoted phrase is included in the statute, and viewing it in light of the underlying general policy, it is reasonable to conclude that such provision restricts or clarifies the types of cases that are removable by a federal court officer.

Where, a here, a plaintiff is challenging a receiver's personal dereliction of court imposed duties and complaining of a receiver's conduct before the appointing federal court, the issues and defenses to be tried would involve an examination of the duties and obligations of the receiver as ordered by the appointing federal court. As such, the acts of the receiver in issue are directly under color of office or in the performance of court imposed duties. Since an examination of the receiver's acts directly involves an examination of the appointing federal court's orders, there is a strong federal interest in providing federal court access.

In contrast, where an action only involves state law and the receiver is only charged with vicarious wrongdoing, as in Gay v. Ruff, supra, the receiver's liability is not directly based upon his acts done under color of office or in the performance of his court ordered duties. Accordingly, the nexus between the federal court orders and the charge of wrongdoing is so attenuated that federal court access is not necessary to protect any federal interest.

We therefore, hold that removal under 28 U.S.C. § 1442(a)(3) was proper.

A similar construction has been made with respect to § 1442(a)(1), which allows removal by:

(1) Any officer of the United States or any agency thereof, or person acting under him, for any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue.

The requirement of "any act under color of such office" has been construed as requiring a causal connection between the charged conduct and the official authority.

In Willingham v. Morgan, 395 U.S. 402, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969) the Supreme Court addressed the issue of removability under 28 U.S.C. § 1442(a) (1) in a tort action by a federal prisoner against the warden. Speaking for the Court, Justice Marshall stated:

In a civil suit of this nature, we think it was sufficient for petitioners to have shown that their relationship to respondent derived solely from their official duties. Past cases have interpreted the "color of office" test to require a showing of a "causal connection" between the charged conduct and asserted official authority. Maryland v. Soper (No. 1), supra (270 U.S. 9), at 33 (46 S.Ct. 185 at 190-191, 70 L.Ed. 449).... In this case, once petitioners had shown that their only contact with respondent occurred inside the penitentiary, while they were performing their duties, we believe that they had demonstrated the required "causal connection." 395 U.S. at 409, 89 S.Ct. at 1817 (footnote omitted).

Appellants next contend that not all of the defendants joined in the removal petition and therefore it was error to deny remand.

The general procedural removal statute, 28 U.S.C. § 1446(a), provides that "a defendant or defendants" desiring to remove any action from the state court shall file a petition in the federal district court within which such action is pending. As a general rule, all defendants who may properly join in the removal petition must join. Chicago, Rock Island and Pacific Railway Co. v. Martin, 178 U.S. 245, 20 S.Ct. 854, 44 L.Ed. 1055 (1900); Tri-Cities Newspapers v. Tri-Cities Printing Pressmen and Assistants' Local 349, 427 F.2d 325 (5th Cir. 1970).

28 U.S.C. § 1442(a) provides a right of removal independent of U.S.C. § 1441, for federal officers and, unlike the general § 1441 removal statute, is not keyed to the original jurisdiction of the federal district court. Section 1442(a) provides:

(a) A civil action or criminal prosecution commenced in a State court against any of the following persons may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:

(3) Any officer of the courts of the United States, for any Act under color of office or in the performance of his duties ... (Emphasis added.)

Section 1441 sets out, inter alia, actions which are generally removable: actions over which the district courts have original jurisdiction by statute, federal question or diversity jurisdiction. ² Courts have made a distinction in interpreting §§ 1442 and 1441. While § 1441, as in § 1446(a), provides for removal "by the defendant or the defendants," § 1442(a) uses the language, emphasized above, of removal "by them," which refers to the federal officers listed in subsection (3), supra.

In Bradford v. Harding, 284 F.2d 307 (2d Cir. 1960), the Second Circuit clarified and discussed this distinction between §§ 1441 and 1442:

Whereas § 1441 provides for removal "by the defendant or the...